FIs working on common plan to restructure corporat
Hughes Escorts focus on buyouts

Calcutta, Nov 11: 
Leading financial institutions and banks are putting their heads together to work out a uniform mechanism to restructure corporate debt.

G.P. Gupta, chairman of Industrial Development Bank of India (IDBI), who was in the city to address a seminar on ‘Indian industry in transition: Towards competitiveness’, organised by the Indian Chamber of Commerce, said that all the FIs and banks have discussed the issue of corporate debt restructuring and a final mechanism will be evolved within a month’s time.

“Our suggestion is that if the majority of the lenders agree to a particular restructuring package then all the other lenders should fall in line,” Gupta said.

“If in any case the FIs fail to arrive at a conclusion on debt restructuring of a certain company then the standing committee will look into the matter,” he further added.

Once the mechanism is worked out it will be placed before the standing coordination committee of the Reserve Bank of India for final approval. The standing coordination committee, set up by RBI in September last year, is chaired by G. P. Gupta, while other members include ICICI chairman K.V. Kamath, Deepak Parekh of HDFC and chairmen of the Unit Trust of India, State Bank of India, IBA and the Bank of Baroda.

P. V. Narasimham, chairman of IFCI, agreed that debt restructuring was an important area for the survival of industry.

“Tinkering with the debt issue may result in wiping out a certain industry. On the other hand, industry should also do the needful for its survival. Financial re-engineering is only a part of it, companies should also improve their overall performance.”

Basudeb Sen, chairman and managing director of the Industrial Investment Bank of India said that companies should keep all their creditors informed about their fianncial health.

He urged that companies should provide real time access to financials, organisation and other information to all equity and preference share holders, bond holders, lenders, suppliers, customers and employees.

Regarding the disbursal made by the FIs in the first half of the current year, Gupta said the total sanctions were to the tune of Rs 50229 crore whereas the disbursal was in the region of Rs 28,229 crore.    

Calcutta, Nov 11: 
Hughes Escorts, a 50:50 joint venture between the Escorts group and Hughes Network of the US, will adopt the acquisition route to expand its services in the area of satellite communication.

A senior company official said Hughes Escorts will channel most of its future investments for acquisitions in related areas. The company, which has a 65 per cent share in the Vsat market, recently opened talks with one of its rivals, Comsat Max, to acquire a management stake.

“We got the offer from Comsat through a broker. However, the price quoted by the company is very high. We are yet to decide whether we should take over the company at that price,” the official said.

Hughes Escorts is expecting to post a turnover of Rs 140 crore for the year ending December 2000. Net profit is expected to go up to Rs 10 crore during the same period. The company has so far made a capital investment of Rs 30 crore this year. The company posted a growth rate of 35 per cent over the last five years. “We expect to be able to maintain the same growth rate in future as well,” the official added.

Chief operating officer Partho Banerjee said the company was gearing up its services sector which currently contributes 55 per cent to its total turnover. The hardware sector contributes the remaining 45 per cent. Banerjee said the company was in the process of entering into strategic tieups with some global leaders working on the ASP platform for business-to-business solutions. “We are signing up an exclusive tieup with the $ 200 million Intelli Group of the US to offer a dealer-distribution network through the internet,” he said.

The company also plans to offer solutions for distance learning programmes and is currently in talks with the country’s premier institutes including the IITs and IIMs for this purpose.

Hughes Escorts is also setting up a satellite network in West Bengal. The project, which is being funded by the World Bank, will connect all the district headquarters and major state government offices with the state secretariat. The network will connect 120 locations with the central hub in Vidyut Bhavan at Salt Lake.    


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